How to Get the Results You Want in a Family Business
Updated: Dec 24, 2019
Science has shown that when we are gripped by emotion, our executive functions shut down, and we take actions that satisfy our emotional needs, not those that achieve the results we want. It’s hard to find anything more emotional the crossroads of family and money, so imagine the challenge that presents to leaders in a family business.
Fortunately, leaders have access to many tools and techniques to overcome these challenges.
First, some background about how the human brain works: As internationally known psychologist Daniel Goleman outlined in his groundbreaking book, Emotional Intelligence: Why It Can Matter More than IQ, human beings respond to every stimulus based on the following filter: Is this a threat? If yes, then our so-called lizard brain (amygdala) hijacks our rational brain (prefrontal cortex) and we act based on emotion, not reason. We default to fight, flight or freeze, and as a result, we frequently take action that undermines the exact goal we are trying to achieve.
This brain filter serves us well when we encounter a hungry bear in the woods, but less so when we are threatened by something at work. How many of us have regretted an angry outburst at the office, or an email sent in a fit of frustration?
We’ve all seen examples of the fight, flight, freeze and appease responses in family businesses.
A frequent trigger of the “fight” response happens when one family member accuses another family member of being “a lazy, free-loader.” If not addressed early on, initial whispering complaints can grow into outright hostility, which results in lost productivity in the business, and a heavy burden on the leader who is often reluctant to take sides. Eventually, the family can start to resemble the Bickersons, which leads us the next response to an amygdala hijack.
Many children who grow up in a family business filled with discord flee the family business to escape the tension. Moreover, the more talented children tend to leave because they have the skills and the confidence to thrive outside the family business. As a result, leaders have fewer options in planning for succession. In fact, sometimes, it becomes a tipping point to trigger a sale instead of a transfer to the next generation.
Speaking of succession, succession planning often triggers a “freeze” response in family business leaders. Not only do they fear that transferring ownership to the next generation will threaten their ability to afford the retirement life they want, even deeper, it can challenge a leader’s identity. Founding entrepreneurs become one with their business. Leaving the business forces leaders to ask themselves, “Who am I without my business?” Without a good answer, they freeze. They postpone the work they know they must do to set future generations up for success. Yet when they postpone indefinitely, their families end up stuck with undesirable consequences that could have been avoided.
We often regret action (and non-action) driven from a fight, flight or freeze response, because it gets in the way of achieving the results we really want. It satisfies short-term emotional needs that we don’t even know we are feeling.
Many of us have witnessed the frustration of a family member, and some of us know what it feels like to be on the receiving end of that frustration. Under stressful conditions, this behavior tends to appear more frequently. In response, many of us try to appease the anxiety of the loved one and we develop a pattern of behavior that serves us in the short-run (avoids the discomfort) and poses challenges for us in the long-run (reinforces problematic behavior.)
Fortunately, there are tools leaders and family members can use to avoid these common responses:
1. Become self-aware
This is the hardest, but most essential step in the process. To become self-aware, start by reflecting on how your body reacts to a strong emotion such as anger or frustration. Does your heart pound? Do your palms sweat? Does your stomach tighten? Each of us responds to anxiety in a different manner, but our bodies invariably reflect that emotion somewhere. Then the next time you notice your heart pound, your hands sweat, etc., you’re more likely to recognize that you are experiencing an amygdala hijack.
Once you recognize that you’ve been triggered, get curious. Observe these emotions with detached interest, not judgment. Resist the urge to lash out or check out. Instead, take a break. Give yourself a time out. At a minimum, take 10 seconds to breathe slowly and deeply, and better yet, sleep on it or take a few days to let the increased cortisol levels, triggered by the strong emotion, decrease in your body.
Recognize that you are probably not the only person feeling threatened. Close your eyes and put yourself in the other person’s shoes. Giving them the benefit of the doubt, ask yourself what could be driving their actions? Think compassionately about their perspective and try to understand what could be motivating them. Recognize that whatever you assume is only an assumption, not a fact.
4. Communicate with deliberate purpose
Hold on to that compassion when you take action. If you made assumptions in Step 3, ask open-ended questions that help you validate or invalidate your assumptions. Then choose action that drives towards the result you want. This sometimes requires checking your ego at the door. If you find yourself struggling to check that ego, start back at Step 1, and ask yourself what’s more important: Satisfying your emotional needs or achieving the results you want?
Yes, family businesses are more emotional than non-family businesses, and therefore, more challenging to lead than a non-family business. The more self-aware you are in the moment, the more you are able to recognize when your rational brain has been hijacked, and the better equipped you are to take thoughtful actions that achieve the results you want.
Cathy Carroll is the founder of Legacy Onward, Inc. which provides leadership coaching for family businesses. Growing up as a third generation member of a family business, Cathy enjoyed a 20-year corporate career before leading her father’s manufacturing business. Legacy Onward is dedicated to helping family businesses achieve greater profits through greater performance.